Somerfield has unveiled plans to make its stores smaller and plans to sub-let some selling space to other retailers.
The group, which has added £257 million to mits value following a property revaluation, has stated new store formats will concentrate on smaller stores in the convenience market.
Executive chairman John von Spreckelsen said: 'We are operating in the convenience market - the only growing sector in UK food retailing.' Somerfield also aims to push ahead with a sub-letting trial to non-competing retailers. Peacocks, the discount clothes chain, already has a presence in six Somerfield stores but the group now plans to let out space in 50 stores nation-wide. Other partners may include DIY stores and Blockbuster, the video rental chain.
Approximately £200m will be spent this year on revamping its Somerfield and Kwik Save stores, but because of the group's large portfolio, it will take until 2006 before the Somerfield refits are completed.
Somerfield last month turned down a £510m takeover bid saw shares rise 5.25p to 127.5p.